PRI Conference Links Long-Term Investing With Financial Stability

(Paris) – The UN-backed Principles for Responsible Investment (PRI) today convened its fifth annual conference, with leading investors stressing the importance of adopting long-term investment policies as a way to achieve greater financial stability in global markets.

More than 500 international institutional investors and other delegates – a record conference turnout – attended the opening session of the two-day event of the PRI initiative, which has grown to include more than 900 investor signatories representing approximately USD 30 trillion in assets under management. The PRI was co-founded by the UN Global Compact and the UNEP Finance Initiative, which both hold seats on the PRI Advisory Council, the initiative’s overarching governance body.

“With global financial markets in turmoil, and economic prospects dimming further in key regions of the world, this conference offered investors an opportunity to discuss how the tenets of responsible investment, including adopting long-term investment horizons and comprehensive risk-management policies, can help support financial stability”, said Gavin Power, Deputy Director of the UN Global Compact and special designate to the PRI Advisory Council.

In his opening address, Wolfgang Engshuber, Chair of the PRI, emphasised that proper integration of environmental, social, and governance (or “ESG”) issues by investors can help mitigate investment risks and should be seen as part of the solution to today’s financial instability.

Her Royal Highness, Princess Maxima of the Netherlands, emphasized the importance of extending responsible financial services and products to people in the developing world through programs such as the PRI’s new Principles for Investors in Inclusive Finance.

Following these keynote addresses, Mr James Gifford, Executive Director of the PRI, presented a progress report on the PRI initiative, including the following data from the most recent survey:

  • 94 percent of PRI signatories have explicit policies that refer to ESG issues
  • 90 percent of signatories have collaborated with other investors on responsible investment topics
  • 315 signatories were involved in the PRI Engagement Clearinghouse during the past year, with 782 companies contacted on ESG issues

During a special conference session on ESG issues and corporate governance, the UN Global Compact – through its Global Compact LEAD initiative – released the draft “Recommendations for Board Adoption and Oversight of Corporate Sustainability” for consultation with investors. Related, Global Compact LEAD is launching a company-investor working group which will examine executive compensation in relation to sustainability issues, in addition to a working group that will focus on improving communication between companies and investors.

Day one of the conference also featured a session on “Taking ESG Reporting to the Next Level”, which included discussions related to the UN Global Compact’s new COP Differentiation Model.

Gavin Power
Deputy Director
UN Global Compact